Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Part I. Financial Information
Index
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)			Page
Trends and Factors Impacting Our Performance			31
Summary of Key Performance Measures			32
Results of Operations			33
Results of Operations – Segments			36
Non-GAAP Financial Measures			37
Liquidity and Capital Resources			41
Recently Issued Accounting Pronouncements			43
Critical Accounting Estimates			43

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and corresponding notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis provide information management believes to be relevant to understanding the financial condition and results of operations of GE HealthCare Technologies Inc. and its subsidiaries (“GE HealthCare,” the “Company,” “our,” “us,” or “we”) for the three and nine months ended September 30, 2024 and 2023. For a full understanding of our financial condition and results of operations, the below discussion should be read alongside the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances; see “Forward-Looking Statements.” Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, and particularly in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

On January 3, 2023, the General Electric Company, which now operates as GE Aerospace (“GE”), completed the spin-off of GE HealthCare Technologies Inc. (the “Spin-Off”). For further information regarding the Spin-Off, refer to Note 1, “Organization and Basis of Presentation.”

The following tables are presented in millions of United States (“U.S.”) dollars unless otherwise stated, except for per-share amounts which are presented in U.S. dollars. Certain columns and rows may not sum due to the use of rounded numbers. Percentages presented are calculated from the underlying whole-dollar amounts.

Effective July 1, 2024, Image Guided Therapies, previously part of the Imaging segment, was realigned to the Ultrasound segment to better match its clinical usage and realize stronger business and customer impact by providing the right image guidance in the right care setting. The Ultrasound segment was subsequently renamed Advanced Visualization Solutions (“AVS”). Following this realignment, the Company continues to have four reportable segments: Imaging, AVS, Patient Care Solutions (“PCS”), and Pharmaceutical Diagnostics (“PDx”). These segments have been identified based on the nature of the products sold and how the Company manages its operations. Historical segment financial information presented within this report has been recast to conform to the new reportable segments structure. See Note 3, “Segment Information” for more information.

TRENDS AND FACTORS IMPACTING OUR PERFORMANCE

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and particularly in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

KEY TRENDS AFFECTING RESULTS OF OPERATIONS.

Russia and Ukraine Conflict

We had $152 million and $153 million of assets in, or directly related to, Russia and Ukraine as of September 30, 2024 and December 31, 2023, respectively, none of which are subject to sanctions that impact the carrying value of the assets. We generated revenues of $243 million and $228 million from customers in these two countries for the nine months ended September 30, 2024 and 2023, respectively. The potential inability to repatriate earnings from these two countries will not have a material impact on our ability to operate.

We continue to monitor the effects of Russia’s invasion of Ukraine, including the consideration of financial impact, cybersecurity risks, the applicability and effect of sanctions, and the employee base in Ukraine and Russia. In May 2023, the U.S. Department of Commerce implemented expanded measures that required us to obtain a license for the export, re-export, or transfer of specified medical equipment and spare parts to customers in Russia. As of April 29, 2024, this requirement has been modified to permit us to export, re-export, or transfer medical equipment and spare parts that meet stated criteria under a License Exception, which is expected to eliminate the need for us to obtain individual U.S. licenses in most cases. The European Union and other countries have also expanded licensing requirements for certain spare parts, services, software, and other items. We will continue to apply for licenses to supply to these customers and to support our business in Russia, as required. The implementation of these measures affected our ability to supply customers in Russia during the first three quarters of 2024 and the last three quarters of 2023 and will continue to do so as we confirm applicability of the new U.S. License Exception to our transactions and continue to obtain licenses. There is no guarantee we will obtain all of the licenses for which we applied, that any approvals we obtain will be on a timely basis, or that our business in Russia will not be further disrupted due to evolving legal or operational considerations. The Board, together with management, will continue to assess whether developments related to the conflict have had, or are reasonably likely to have, a material impact on the Company.

China Market

We continue to monitor developments in the market in China. An anti-corruption campaign directed at the healthcare sector, launched last year, is still ongoing. In addition, in March 2024, the government in China announced a new stimulus program (“2024 stimulus”) that includes the healthcare sector and will be implemented through China’s provinces. Both of these factors have contributed to delayed orders and sales in our China business, through the third quarter of 2024. We expect the 2024 stimulus program will result in opportunities for our business in China in the longer term, but it has had a short-term impact as provinces develop and announce their plans and customers wait to understand the details of the 2024 stimulus before making purchasing decisions. We expect the effects of the anti-corruption campaign and the delay in China 2024 stimulus to continue to impact our orders and sales in the near term, although we are unable to predict the exact duration or magnitude of the impact. We expect both of these impacts to be temporary, and we believe the focus of government policy in China on expanding access to healthcare will benefit our business in China in the long term.

Tax Valuation Allowances

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. We evaluate the recoverability of these future tax deductions and credits by evaluating all available positive and negative evidence. We have a valuation allowance against certain U.S. and foreign deferred tax assets and will release the valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized. Depending on our operating results in the future, we may release the valuation allowance associated with our Brazil and French deferred tax assets within the next year. The timing and amount of the valuation allowance release could vary based on our assessment of all available evidence. Release of all, or a portion, of the valuation allowance in Brazil would result in the recognition of certain deferred tax assets in Brazil offset by recognition of certain deferred tax liabilities in the United States. Release of all, or a portion, of the valuation allowance in France would result in the recognition of certain deferred tax assets in France and is expected to result in a decrease to income tax expense for the period in which the release is recorded.

SUMMARY OF KEY PERFORMANCE MEASURES

Management reviews and analyzes several key performance measures including Total revenues, remaining performance obligations (“RPO”), Operating income, Net income attributable to GE HealthCare, Earnings per share, and Cash from (used for) operating activities. Management also reviews and analyzes Organic revenue*, Adjusted earnings before interest and taxes* (“Adjusted EBIT*”), Adjusted net income*, Adjusted tax expense*, Adjusted effective tax rate* (“Adjusted ETR*”), Adjusted earnings per share*, and Free cash flow*, which are non-GAAP financial measures. These measures are reviewed and analyzed in order to evaluate our business performance, identify trends affecting our business, allocate capital, and make strategic decisions, including those discussed below. See “Results of Operations” and “Liquidity and Capital Resources” below for further discussion on our key performance measures.

The non-GAAP financial measures should be considered along with the most directly comparable U.S. GAAP financial measures. Definitions of these non-GAAP financial measures, a discussion of why we believe they are useful to management and investors as well as certain of their limitations, and reconciliations to their most directly comparable U.S. GAAP financial measures are provided below under “Non-GAAP Financial Measures.”

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*Non-GAAP Financial Measure

RESULTS OF OPERATIONS

The following tables set forth our results of operations for each of the periods presented.

Condensed Consolidated Statements of Income			For the three months ended September 30									For the nine months ended September 30
			2024			2023						2024			2023
Sales of products			$	3,201		$	3,186					$	9,454		$	9,530
Sales of services			1,662			1,636						4,899			4,816
Total revenues			4,863			4,822						14,353			14,346
Cost of products			2,033			2,076						6,045			6,197
Cost of services			805			811						2,378			2,383
Gross profit			2,026			1,935						5,930			5,766
Selling, general, and administrative			1,034			996						3,139			3,130
Research and development			316			322						967			890
Total operating expenses			1,350			1,318						4,106			4,020
Operating income			676			617						1,824			1,746
Interest and other financial charges – net			130			138						383			411
Non-operating benefit (income) costs			(102)			(94)						(306)			(332)
Other (income) expense – net			(9)			(63)						(1)			(85)
Income from continuing operations before income taxes			658			636						1,747			1,752
Benefit (provision) for income taxes			(168)			(250)						(435)			(550)
Net income from continuing operations			490			386						1,312			1,202
Income (loss) from discontinued operations, net of taxes			—			(4)						—			(4)
Net income			490			382						1,312			1,198
Net (income) loss attributable to noncontrolling interests			(19)			(7)						(40)			(33)
Net income attributable to GE HealthCare			$	470		$	375					$	1,272		$	1,165

TOTAL REVENUES AND RPO.

Revenues by Segment			For the three months ended September 30															For the nine months ended September 30
			2024			2023			% change			% organic change*						2024			2023			% change			% organic change*
Segment revenues
Imaging			$	2,229		$	2,236		—%			(1)%						$	6,462		$	6,552		(1)%			(1)%
AVS			1,216			1,214			—%			—%						3,692			3,712			(1)%			—%
PCS			779			764			2%			2%						2,298			2,315			(1)%			(1)%
PDx			625			589			6%			7%						1,862			1,715			9%			9%
Other(1)			15			19												39			52
Total revenues			$	4,863		$	4,822		1%			1%						$	14,353		$	14,346		—%			1%

(1) Financial information not presented within the reportable segments, shown within the Other category, represents HealthCare Financial Services which does not meet the definition of an operating segment.

Revenues by Region			For the three months ended September 30												For the nine months ended September 30
			2024			2023			% change						2024			2023			% change
United States and Canada (“USCAN”)			$	2,246		$	2,075		8%						$	6,582		$	6,297		5%
Europe, the Middle East, and Africa (“EMEA”)			1,237			1,249			(1)%						3,617			3,633			—%
China region			564			719			(22)%						1,745			2,105			(17)%
Rest of World			816			779			5%						2,408			2,311			4%
Total revenues			$	4,863		$	4,822		1%						$	14,353		$	14,346		—%

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*Non-GAAP Financial Measure

For the three months ended September 30, 2024

Total revenues were $4,863 million, growing 1% as reported and organically*. Sales of services increased 2% or $26 million primarily due to increased pricing, and Sales of products increased $15 million with strong growth in USCAN and PDx segment revenues largely offset by lower sales volume in China.

The segment revenues were as follows:

• Imaging segment revenues were $2,229 million, flat to the prior year and decreasing 1% organically* with lower sales volume in China, partially offset by an increase in USCAN sales volume;

• AVS segment revenues were $1,216 million, flat to the prior year, with an increase in sales volume in USCAN offset by lower sales volume in China;

• PCS segment revenues were $779 million, growing 2% or $15 million driven by backlog execution; and

• PDx segment revenues were $625 million, growing 6% or $36 million with growth in the USCAN and EMEA regions driven by growth in volume, an increase in price, and new product introductions.

The regional revenues were as follows:

• USCAN revenues were $2,246 million, growing 8% or $171 million with growth across all segment revenues, led by strong growth in PDx and Imaging revenues;

• EMEA revenues were $1,237 million, decreasing 1% or $12 million, following high single digit growth in the prior year, with declines in PCS and AVS revenues largely offset by increases in PDx revenues;

• China region revenues were $564 million, decreasing 22% or $155 million with current year sales impacted by the delayed 2024 stimulus and the ongoing anti-corruption campaign; and

• Rest of World revenues were $816 million, growing 5% or $37 million with growth in all segment revenues, partially offset by unfavorable foreign currency impacts.

For the nine months ended September 30, 2024

Total revenues were $14,353 million, flat to the prior year as reported and growing 1% organically*. The flat result was due to Sales of products decreasing 1% or $76 million, primarily due to decreased volume following double digit reported product revenue growth in the prior year, offset by Sales of services increasing 2% or $83 million driven by increased pricing.

The segment revenues were as follows:

• Imaging segment revenues were $6,462 million, decreasing 1% or $90 million, following high single digit revenue growth in the prior year, with current year impacts from lower sales volume in China and unfavorable foreign currency headwinds;

• AVS segment revenues were $3,692 million, decreasing 1% or $20 million with lower sales volume in China and unfavorable foreign currency impacts, partially offset by an increase in sales volume in USCAN;

• PCS segment revenues were $2,298 million, decreasing 1% or $17 million primarily due to decreased volume following high single digit revenue growth in the prior year; and

• PDx segment revenues were $1,862 million, growing 9% or $147 million with growth in the USCAN and EMEA regions driven by growth in volume, an increase in price, and new product introductions.

The regional revenues were as follows:

• USCAN revenues were $6,582 million, growing 5% or $285 million with growth across all segment revenues;

• EMEA revenues were $3,617 million, flat to the prior year, following high single digit growth in the prior year, with growth in PDx revenues largely offset by decreases in Imaging and PCS revenues;

• China region revenues were $1,745 million, decreasing 17% or $360 million with declines in all segment revenues following double digit growth in the prior year due to the impact from the 2022 COVID stimulus programs, and current year sales impacted by the delayed 2024 stimulus and the ongoing anti-corruption campaign; and

• Rest of World revenues were $2,408 million, growing 4% or $97 million with growth in all segment revenues, partially offset by unfavorable foreign currency impacts.

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*Non-GAAP Financial Measure

Remaining Performance Obligations			As of
			September 30, 2024			December 31, 2023						% change
Products			$	4,808		$	4,930					(2)%
Services			9,756			9,725						—%
Total RPO			$	14,563		$	14,655					(1)%

RPO represents the estimated revenue expected from customer contracts that are partially or fully unperformed inclusive of amounts deferred in contract liabilities, excluding contracts, or portions thereof, that provide the customer with the right to cancel or terminate without incurring a substantive penalty. RPO as of September 30, 2024 decreased 1% from December 31, 2023, primarily due to product fulfillment and cancellations outpacing new contracts, partially offset by the timing of multi-year service contract renewals.

OPERATING INCOME, NET INCOME ATTRIBUTABLE TO GE HEALTHCARE, ADJUSTED EBIT, AND ADJUSTED NET INCOME.**

			For the three months ended September 30																		For the nine months ended September 30
			2024			% of Total revenues			2023			% of Total revenues			% change						2024			% of Total revenues			2023			% of Total revenues			% change
Operating income			$	676		13.9%			$	617		12.8%			10%						$	1,824		12.7%			$	1,746		12.2%			4%
Net income attributable to GE HealthCare			470			9.7%			375			7.8%			25%						1,272			8.9%			1,165			8.1%			9%
Adjusted EBIT*			795			16.3%			744			15.4%			7%						2,217			15.4%			2,119			14.8%			5%
Adjusted net income*			521			10.7%			451			9.4%			16%						1,393			9.7%			1,258			8.8%			11%

For the three months ended September 30, 2024

Operating income was $676 million, an increase of $59 million and 110 basis points as a percent of Total revenues. The increase was due to the following factors:

• Gross profit increased $91 million or 150 basis points as a percent of Total revenues primarily due to a reduction in Cost of products sold. Cost of products sold decreased $43 million or 170 basis points as a percent of Sales of products. The decrease as a percent of sales was driven primarily by cost productivity, partially offset by cost inflation. Cost of services sold decreased $6 million or 120 basis points as a percent of Sales of services. The decrease as a percent of sales was driven by cost productivity and an increase in pricing of our service offerings, partially offset by cost inflation. Included in our total cost of revenue as part of our product investment was $102 million in engineering costs for design follow-through on new product introductions and product lifecycle maintenance subsequent to the initial product launch, compared to $101 million for the prior year comparable period; and

• Total operating expenses increased $32 million primarily due to an increase in Selling, general, and administrative (“SG&A”) expense of $38 million primarily driven by timing of certain costs and the favorable impact of a change in fair value of contingent consideration in the prior year, partially offset by a decrease in Research and Development (“R&D”) investments of $6 million. As a result, SG&A as a percentage of Total revenues increased by 60 basis points and R&D as a percentage of Total revenues decreased by 20 basis points.

Net income attributable to GE HealthCare and Net income margin were $470 million and 9.7%, an increase of $95 million and 190 basis points, respectively, primarily due to the following factors:

*•*Operating income increased $59 million, as discussed above;

• Interest and other financial charges – net decreased $8 million primarily driven by repayments made on the Term Loan Facility;

• Non-operating benefit income increased $8 million primarily due to the impact of the prior year curtailment loss for the GE HealthCare Pension Plan;

• Other income – net decreased $54 million primarily driven by favorable impacts in the prior year from both derivatives gains and the tax indemnification benefit received from GE; and

• Provision for income taxes decreased $82 million primarily due to incremental R&D benefits in the current year as well as non-recurring impacts of the Tax Matters Agreement (“TMA”) with GE in the prior year. For additional detail regarding our income taxes, see Note 10, “Income Taxes.”

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*Non-GAAP Financial Measure

Adjusted EBIT* and Adjusted EBIT margin* were $795 million and 16.3%, an increase of $51 million and 90 basis points, respectively, primarily due to an increase in Gross profit, partially offset by an increase in operating expenses.

Adjusted net income* was $521 million, an increase of $70 million primarily due to the increase in Gross profit and lower provision for income taxes, partially offset by an increase in operating expenses.

For the nine months ended September 30, 2024

Operating income was $1,824 million, an increase of $78 million and 50 basis points as a percent of Total revenues. The increase was due to the following factors:

• Gross profit increased $164 million or 110 basis points as a percent of Total revenues primarily due to a reduction in Cost of products sold. Cost of products sold decreased $152 million or 110 basis points as a percent of Sales of products. The decrease as a percent of sales was driven by cost productivity and an increase in pricing of our products, partially offset by cost inflation. Cost of services sold decreased $5 million or 90 basis points as a percent of Sales of services. The decrease as a percent of sales was driven by cost productivity and an increase in pricing of our service offerings, partially offset by cost inflation. Included in our total cost of revenue as part of our product investment was $305 million in engineering costs for design follow-through on new product introductions and product lifecycle maintenance subsequent to the initial product launch, compared to $321 million for the prior year comparable period; and

• Total operating expenses increased $86 million due to an increase in R&D investments of $77 million and an increase in SG&A expense of $9 million primarily driven by timing of certain costs and increased restructuring spend, partially offset by lower Spin-Off and separation costs. As a result, R&D as a percentage of Total revenues increased by 50 basis points and SG&A as a percentage of Total revenues increased by 10 basis points.

Net income attributable to GE HealthCare and Net income margin were $1,272 million and 8.9%, an increase of $107 million and 70 basis points, respectively, primarily due to the following factors:

*•*Operating income increased $78 million, as discussed above;

• Interest and other financial charges – net decreased $28 million primarily driven by repayments made on the Term Loan Facility;

• Non-operating benefit income decreased $26 million primarily related to lower amortization of net gains on our pension plans;

• Other income – net decreased $84 million primarily driven by favorable impacts in the prior year from both derivatives gains and the tax indemnification benefit received from GE; and

• Provision for income taxes decreased $115 million primarily due to non-recurring impacts of the TMA with GE in the prior year and an incremental charge for the accrual of withholding and other foreign taxes due upon future distribution of earnings. For additional detail regarding our income taxes, see Note 10, “Income Taxes.”

Adjusted EBIT* and Adjusted EBIT margin* were $2,217 million and 15.4%, an increase of $98 million and 70 basis points, respectively, primarily due to an increase in Gross profit, partially offset by investment in R&D.

Adjusted net income* was $1,393 million, an increase of $135 million primarily due to an increase in Gross profit and lower provision for income taxes, partially offset by investment in R&D.

RESULTS OF OPERATIONS – SEGMENTS

We exclude from Segment EBIT certain corporate-related expenses and certain transactions or adjustments that our Chief Operating Decision Maker (which is our Chief Executive Officer) considers to be non-operational, such as Interest and other financial charges – net, Benefit (provision) for income taxes, restructuring costs, acquisition and disposition-related benefits (charges), Spin-Off and separation costs, Non-operating benefit (income) costs, gain (loss) on business and asset dispositions, amortization of acquisition-related intangible assets, Net (income) loss attributable to noncontrolling interests, Income (loss) from discontinued operations, net of taxes, and investment revaluation gain (loss). See “Results of Operations” section above for discussion on segment revenue performance.

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*Non-GAAP Financial Measure

Segment EBIT			For the three months ended September 30																		For the nine months ended September 30
			2024			% of segment revenues			2023			% of segment revenues			% change						2024			% of segment revenues			2023			% of segment revenues			% change
Segment EBIT(1)
Imaging			$	287		12.9		%	$	243		10.9		%	18		%				$	660		10.2		%	$	566		8.6		%	17		%
AVS			232			19.0		%	254			20.9		%	(9)		%				744			20.2		%	798			21.5		%	(7)		%
PCS			82			10.6		%	80			10.5		%	3		%				241			10.5		%	273			11.8		%	(12)		%
PDx			193			30.9		%	166			28.2		%	16		%				571			30.6		%	473			27.6		%	21		%

(1)For additional details regarding Segment EBIT, see Note 3, “Segment Information.”

For the three months ended September 30, 2024

*•*Imaging Segment EBIT was $287 million, an increase of $44 million due to cost productivity, favorable mix, and an increase in price, partially offset by cost inflation;

*•*AVS Segment EBIT was $232 million, a decrease of $22 million due to unfavorable mix, with cost productivity offsetting inflation;

*•*PCS Segment EBIT was $82 million, an increase of $2 million with cost productivity offsetting inflation; and

*•*PDx Segment EBIT was $193 million, an increase of $27 million due to an increase in price, growth in sales volume, and cost productivity.

For the nine months ended September 30, 2024

*•*Imaging Segment EBIT was $660 million, an increase of $94 million due to cost productivity and an increase in price, partially offset by cost inflation;

*•*AVS Segment EBIT was $744 million, a decrease of $54 million due to cost inflation and unfavorable mix, partially offset by cost productivity;

*•*PCS Segment EBIT was $241 million, a decrease of $32 million due to cost inflation and a decrease in sales volume, partially offset by cost productivity; and

*•*PDx Segment EBIT was $571 million, an increase of $98 million due to an increase in price, growth in sales volume, and cost productivity, partially offset by investments and cost inflation.

NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures presented in this Quarterly Report on Form 10-Q are supplemental measures of our performance and our liquidity that we believe will help investors understand our financial condition, cash flows, and operating results, and assess our future prospects. When read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for making financial, operational, and planning decisions. Descriptions of the reported non-GAAP measures are included below.

We report Organic revenue and Organic revenue growth rate to provide management and investors with additional understanding and visibility into the underlying revenue trends of our established, ongoing operations, as well as provide insights into overall demand for our products and services. To calculate these measures, we exclude the effect of acquisitions, dispositions, and foreign currency rate fluctuations.

We report EBIT, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, and Adjusted earnings per share to provide management and investors with additional understanding of our business by highlighting the results from ongoing operations and the underlying profitability factors, on a normalized basis. To calculate these measures we exclude, and reflect in the detailed reconciliations below, the following adjustments as applicable: Interest and other financial charges - net, Net (income) loss attributable to noncontrolling interests, Non-operating benefit (income) costs, Benefit (provision) for income taxes and certain tax related adjustments, and certain non-recurring and/or non-cash items. We may from time to time consider excluding other non-recurring items to enhance comparability between periods. Adjusted EBIT margin is calculated by taking Adjusted EBIT divided by Total revenues for the same period.

We report Adjusted tax expense and Adjusted effective tax rate (“Adjusted ETR”) to provide investors with a better understanding of the normalized tax rate applicable to our business and provide more consistent comparability across periods. Adjusted tax expense excludes the income tax related to the pre-tax income adjustments included as part of Adjusted net income and certain income tax adjustments, such as adjustments to deferred tax assets or liabilities. We may from time to time consider excluding other non-recurring tax items to enhance comparability between periods. Adjusted ETR is Adjusted tax expense divided by income before income taxes less the pre-tax income adjustments referenced above.

We report Free cash flow to provide management and investors with an important measure of our ability to generate cash on a normalized basis and provide insight into our flexibility to allocate capital. Free cash flow is Cash from (used for) operating activities – continuing operations including cash flows related to the additions and dispositions of property, plant, and equipment (“PP&E”) and additions of internal-use software. Free cash flow does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the capital required for debt repayments.

Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes. In order to compensate for the discussed limitations, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. The detailed reconciliations of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure are provided below, and no single financial measure should be relied on to evaluate our business.

Organic Revenue*			For the three months ended September 30												For the nine months ended September 30
			2024			2023			% change						2024			2023			% change
Imaging revenues			$	2,229		$	2,236		—%						$	6,462		$	6,552		(1)%
Less: Acquisitions(1)			16			—									29			—
Less: Dispositions(2)			—			—									—			—
Less: Foreign currency exchange			(8)			—									(65)			—
Imaging Organic revenue*			$	2,220		$	2,236		(1)%						$	6,497		$	6,552		(1)%
AVS revenues			$	1,216		$	1,214		—%						$	3,692		$	3,712		(1)%
Less: Acquisitions(1)			—			—									—			—
Less: Dispositions(2)			—			—									—			—
Less: Foreign currency exchange			(2)			—									(22)			—
AVS Organic revenue*			$	1,218		$	1,214		—%						$	3,713		$	3,712		—%
PCS revenues			$	779		$	764		2%						$	2,298		$	2,315		(1)%
Less: Acquisitions(1)			—			—									—			—
Less: Dispositions(2)			—			—									—			—
Less: Foreign currency exchange			—			—									(4)			—
PCS Organic revenue*			$	779		$	764		2%						$	2,302		$	2,315		(1)%
PDx revenues			$	625		$	589		6%						$	1,862		$	1,715		9%
Less: Acquisitions(1)			—			—									—			—
Less: Dispositions(2)			—			—									—			—
Less: Foreign currency exchange			(5)			—									(13)			—
PDx Organic revenue*			$	630		$	589		7%						$	1,876		$	1,715		9%
Other revenues			$	15		$	19		(22)%						$	39		$	52		(25)%
Less: Acquisitions(1)			—			—									—			—
Less: Dispositions(2)			—			—									—			—
Less: Foreign currency exchange			—			—									—			—
Other Organic revenue*			$	15		$	19		(21)%						$	39		$	52		(25)%
Total revenues			$	4,863		$	4,822		1%						$	14,353		$	14,346		—%
Less: Acquisitions(1)			16			—									29			—
Less: Dispositions(2)			—			—									—			—
Less: Foreign currency exchange			(15)			—									(104)			—
Organic revenue*			$	4,863		$	4,822		1%						$	14,427		$	14,346		1%

(1)			Represents revenues attributable to acquisitions from the date the Company completed the transaction through the end of four quarters following the transaction.
(2)			Represents revenues attributable to dispositions for the four quarters preceding the disposition date.

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*Non-GAAP Financial Measure

Adjusted EBIT*			For the three months ended September 30												For the nine months ended September 30
			2024			2023			% change						2024			2023			% change
Net income attributable to GE HealthCare			$	470		$	375		25%						$	1,272		$	1,165		9%
Add: Interest and other financial charges – net			130			138									383			411
Add: Non-operating benefit (income) costs			(102)			(94)									(306)			(332)
Less: Benefit (provision) for income taxes			(168)			(250)									(435)			(550)
Less: Income (loss) from discontinued operations, net of taxes			—			(4)									—			(4)
Less: Net (income) loss attributable to noncontrolling interests			(19)			(7)									(40)			(33)
EBIT*			$	685		$	680		1%						$	1,825		$	1,831		—%
Add: Restructuring costs(1)			22			3									90			34
Add: Acquisition and disposition-related charges (benefits)(2)			(4)			(14)									(7)			(15)
Add: Spin-Off and separation costs(3)			56			45									182			175
Add: (Gain) loss on business and asset dispositions(4)			1			—									—			—
Add: Amortization of acquisition-related intangible assets			34			32									100			95
Add: Investment revaluation (gain) loss(5)			1			(2)									26			(1)
Adjusted EBIT*			$	795		$	744		7%						$	2,217		$	2,119		5%
Net income margin			9.7%			7.8%			190 bps						8.9%			8.1%			70 bps
Adjusted EBIT margin*			16.3%			15.4%			90 bps						15.4%			14.8%			70 bps

(1)			Consists of severance, facility closures, and other charges associated with restructuring programs.
(2)			Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.
(3)			Costs incurred in the Spin-Off and separation from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements with GE, and other one-time costs.
(4)			Consists of gains and losses resulting from the sale of assets and investments.
(5)			Primarily relates to valuation adjustments for equity investments.

Adjusted Net Income*			For the three months ended September 30												For the nine months ended September 30
			2024			2023			% change						2024			2023			% change
Net income attributable to GE HealthCare			$	470		$	375		25%						$	1,272		$	1,165		9%
Add: Non-operating benefit (income) costs			(102)			(94)									(306)			(332)
Add: Restructuring costs(1)			22			3									90			34
Add: Acquisition and disposition-related charges (benefits)(2)			(4)			(14)									(7)			(15)
Add: Spin-Off and separation costs(3)			56			45									182			175
Add: (Gain) loss on business and asset dispositions(4)			1			—									—			—
Add: Amortization of acquisition-related intangible assets			34			32									100			95
Add: Investment revaluation (gain) loss(5)			1			(2)									26			(1)
Add: Tax effect of reconciling items(6)			(3)			(4)									(26)			(3)
Add: Spin-Off and other tax adjustments(7)			46			106									60			136
Less: Income (loss) from discontinued operations, net of taxes			—			(4)									—			(4)
Adjusted net income*			$	521		$	451		16%						$	1,393		$	1,258		11%

(1)			Consists of severance, facility closures, and other charges associated with restructuring programs.
(2)			Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.
(3)			Costs incurred in the Spin-Off and separation from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements with GE, and other one-time costs.
(4)			Consists of gains and losses resulting from the sale of assets and investments.
(5)			Primarily relates to valuation adjustments for equity investments.
(6)			The tax effect of reconciling items is calculated using the statutory tax rate, taking into consideration the nature of the items and the relevant taxing jurisdiction.
(7)			Consists of certain income tax adjustments, including the accrual of a deferred tax liability on the prior period earnings of certain of the Company’s foreign subsidiaries for which the Company is no longer permanently reinvested, the impact of adjusting deferred tax assets and liabilities to stand-alone GE HealthCare tax rates, and the impact of tax legislation changes. As of the third quarter of 2024 this line additionally includes discrete tax impacts resulting from the Spin-Off and separation from GE previously reported under Tax effect of reconciling items.

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*Non-GAAP Financial Measure

Adjusted Earnings Per Share*			For the three months ended September 30												For the nine months ended September 30
(In dollars, except shares outstanding presented in millions)			2024			2023			$ change						2024			2023			$ change
Diluted earnings per share – continuing operations			$	1.02		$	0.83		$	0.20					$	2.77		$	2.16		$	0.61
Add: Deemed preferred stock dividend of redeemable noncontrolling interest			—			—									—			0.40
Add: Non-operating benefit (income) costs			(0.22)			(0.21)									(0.67)			(0.73)
Add: Restructuring costs(1)			0.05			0.01									0.20			0.07
Add: Acquisition and disposition-related charges (benefits)(2)			(0.01)			(0.03)									(0.02)			(0.03)
Add: Spin-Off and separation costs(3)			0.12			0.10									0.40			0.38
Add: (Gain) loss on business and asset dispositions(4)			0.00			—									—			—
Add: Amortization of acquisition-related intangible assets			0.08			0.07									0.22			0.21
Add: Investment revaluation (gain) loss(5)			0.00			(0.00)									0.06			(0.00)
Add: Tax effect of reconciling items(6)			(0.01)			(0.01)									(0.06)			(0.01)
Add: Spin-Off and other tax adjustments(7)			0.10			0.23									0.13			0.30
Adjusted earnings per share*			$	1.14		$	0.99		$	0.15					$	3.04		$	2.75		$	0.29
Diluted weighted-average shares outstanding			459			458									459			458

(1)			Consists of severance, facility closures, and other charges associated with restructuring programs.
(2)			Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.
(3)			Costs incurred in the Spin-Off and separation from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements with GE, and other one-time costs.
(4)			Consists of gains and losses resulting from the sale of assets and investments.
(5)			Primarily relates to valuation adjustments for equity investments.
(6)			The tax effect of reconciling items is calculated using the statutory tax rate, taking into consideration the nature of the items and the relevant taxing jurisdiction.
(7)			Consists of certain income tax adjustments, including the accrual of a deferred tax liability on the prior period earnings of certain of the Company’s foreign subsidiaries for which the Company is no longer permanently reinvested, the impact of adjusting deferred tax assets and liabilities to stand-alone GE HealthCare tax rates, and the impact of tax legislation changes. As of the third quarter of 2024 this line additionally includes discrete tax impacts resulting from the Spin-Off and separation from GE previously reported under Tax effect of reconciling items.

Adjusted Tax Expense and Adjusted ETR**			For the three months ended September 30									For the nine months ended September 30
			2024			2023						2024			2023
Benefit (provision) for income taxes			$	(168)		$	(250)					$	(435)		$	(550)
Add: Tax effect of reconciling items(1)			(3)			(4)						(26)			(3)
Add: Spin-Off and other tax adjustments(2)			46			106						60			136
Adjusted tax expense*			$	(124)		$	(148)					$	(401)		$	(417)
Effective tax rate			25.5%			39.3%						24.9%			31.4%
Adjusted effective tax rate*			18.7%			24.4%						21.9%			24.4%

(1)			The tax effect of reconciling items is calculated using the statutory tax rate, taking into consideration the nature of the items and the relevant taxing jurisdiction.
(2)			Consists of certain income tax adjustments, including the accrual of a deferred tax liability on the prior period earnings of certain of the Company’s foreign subsidiaries for which the Company is no longer permanently reinvested, the impact of adjusting deferred tax assets and liabilities to stand-alone GE HealthCare tax rates, and the impact of tax legislation changes. As of the third quarter of 2024 this line additionally includes discrete tax impacts resulting from the Spin-Off and separation from GE previously reported under Tax effect of reconciling items.

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*Non-GAAP Financial Measure

Free Cash Flow*			For the nine months ended September 30
			2024			2023						% change
Cash from (used for) operating activities – continuing operations			$	1,042		$	1,051					(1)%
Add: Additions to PP&E and internal-use software			(299)			(293)
Add: Dispositions of PP&E			—			1
Free cash flow*			$	743		$	759					(2)%

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2024, our Cash, cash equivalents, and restricted cash balance in the Condensed Consolidated Statements of Financial Position was $3,568 million. We have historically generated positive cash flows from operating activities. Additionally, we have access to revolving credit facilities of $3,500 million in aggregate, described in detail in Note 8, “Borrowings.”

We believe that our existing balance of Cash, cash equivalents, and restricted cash, future cash generated from operating activities, access to capital markets, and existing credit facilities will be sufficient to meet the needs of our current and ongoing operations, pay taxes due, service our existing debt, and fund investments in our business for at least the next 12 months.

The following table summarizes our cash flows for the periods presented:

Cash Flow			For the nine months ended September 30
			2024			2023
Cash from (used for) operating activities – continuing operations			$	1,042		$	1,051
Cash from (used for) investing activities – continuing operations			(674)			(470)
Cash from (used for) financing activities – continuing operations			704			422
Free cash flow*			743			759

Operating Activities

Cash generated from operating activities in the nine months ended September 30, 2024 was $1,042 million and included Net income from continuing operations of $1,312 million, non-cash charges primarily for depreciation and amortization of $440 million, and $711 million in outflows from incremental changes in assets and liabilities, primarily driven by company-funded benefit payments for postretirement benefit plans, an increase in inventories mainly due to inventory build to meet higher demand, and compensation and benefit payments.

Cash generated from operating activities in the nine months ended September 30, 2023 was $1,051 million and included Net income from continuing operations of $1,202 million, non-cash charges primarily for depreciation and amortization of $466 million, and $617 million in outflows from incremental changes in assets and liabilities, primarily driven by company funded benefit payments for postretirement benefit plans, a decrease in account payables, and an increase in inventories.

Investing Activities

Cash used for investing activities in the nine months ended September 30, 2024 was $674 million and primarily included additions to PP&E of $299 million related mostly to manufacturing capacity expansion and new product introductions, purchases of businesses, net of cash acquired, of $259 million related to MIM Software Inc. (“MIM Software”), and payment of $94 million for settlement of cross-currency swaps that were designated in net investment hedges. Refer to Note 7, “Acquisitions, Goodwill, and Other Intangible Assets” for additional information on the MIM Software acquisition, and Note 12, “Financial Instruments and Fair Value Measurements” for additional information on the settlement of cross-currency swaps.

Cash used for investing activities in the nine months ended September 30, 2023 was $470 million and primarily included additions to PP&E of $293 million related mostly to new product introductions, manufacturing capacity expansion, and purchases of businesses, net of cash acquired, of $147 million primarily related to Caption Health, Inc.

Financing Activities

Cash generated from financing activities in the nine months ended September 30, 2024 was $704 million and primarily included $994 million of net proceeds from the issuance of $1,000 million aggregate principal amount of senior unsecured notes due in 2029, partially offset by repayment of $150 million of our outstanding Term Loan Facility. Refer to Note 8, “Borrowings” for further information.

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*Non-GAAP Financial Measure

Cash generated from financing activities in the nine months ended September 30, 2023 was $422 million and primarily included $2,020 million of newly issued debt, partially offset by $1,317 million of transfers to GE, and $211 million of Redemption of noncontrolling interests.

Free cash flow*

Free cash flow* was $743 million for the nine months ended September 30, 2024 and primarily included $1,042 million of cash generated from operating activities, partially offset by $299 million of cash used for additions to PP&E.

Free cash flow* was $759 million for the nine months ended September 30, 2023 and primarily included $1,051 million of cash generated from operating activities, partially offset by $293 million of cash used for additions to PP&E.

Capital Expenditures

Cash used for capital expenditures was $299 million and $293 million for the nine months ended September 30, 2024 and 2023, respectively. Capital expenditures were primarily for manufacturing capacity expansion, new product introductions, and equipment and tooling for new and existing products.

Material Cash Requirements

In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations under lease, debt, and other commitments are provided in Note 7, “Leases,” Note 9, “Borrowings,” and Note 14, “Commitments, Guarantees, Product Warranties, and Other Loss Contingencies” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. We have material cash requirements related to our pension obligations as described in Note 9, “Postretirement Benefit Plans.” Additionally, on April 1, 2024, we funded the acquisition of MIM Software with cash on hand. Further information regarding this acquisition is provided in Note 7, “Acquisitions, Goodwill, and Other Intangible Assets.”

Debt and Credit Facilities

As part of our capital structure, we have incurred debt. The servicing of this debt is supported by cash flows from our operations. As of September 30, 2024, we had $10,312 million of total debt compared to $9,442 million as of December 31, 2023. The increase in debt was due primarily to our issuance, in the third quarter of 2024, of $1,000 million aggregate principal amount of senior unsecured notes due in 2029, partially offset by a repayment of $150 million of the outstanding Term Loan Facility in the first quarter of 2024. As of September 30, 2024, there were $1,000 million of senior notes due in November 2024 recognized within Short-term borrowings in our Condensed Consolidated Statements of Financial Position. We plan to use the net proceeds from the debt issuance referenced above, together with cash on hand, to repay the $1,000 million aggregate principal amount outstanding of the senior unsecured notes due in November 2024.

The weighted average interest rate for the Notes and our Credit Facilities for the nine months ended September 30, 2024 was 6.05%. We had no principal debt repayments on the Notes for the nine months ended September 30, 2024.

In addition to the Term Loan Facility, our credit facilities include a five-year senior unsecured revolving facility that provides borrowings of up to $2,500 million expiring in January 2028, and a 364-day senior unsecured revolving facility that provides borrowings of up to $1,000 million expiring in December 2024. As of September 30, 2024, there were no outstanding borrowings on either of the two revolving facilities.

The Credit Facilities include various customary covenants that limit, among other things, the incurrence of liens securing debt, the entry into certain fundamental change transactions by GE HealthCare, and the maximum permitted leverage ratio. As of September 30, 2024, we were in compliance with the covenant requirements, including the maximum consolidated net leverage ratio.

For additional details on debt and credit facilities, see Note 8, “Borrowings.”

Access to Capital and Credit Ratings

In connection with the Spin-Off, we accessed the capital markets and raised $10,250 million of debt by issuing $8,250 million of senior unsecured notes in November 2022, completed a drawdown of the Term Loan Facility of $2,000 million in January 2023, and arranged $3,500 million of revolving credit facilities to further support our liquidity needs. In the third quarter of 2024, we issued $1,000 million aggregate principal amount of senior unsecured notes due in 2029. We plan to continue to rely on capital markets, and we expect to have access to credit facilities to fund our operations. The cost and availability of debt financing will be influenced by our credit ratings and market conditions. Moody’s Investors Service (“Moody’s”), Standard and Poor’s Global Ratings (“S&P”), and Fitch Ratings (“Fitch”) currently issue ratings on our long-term debt. Our credit ratings as of October 23, 2024 are set forth in the table below.

			Moody’s			S&P			Fitch
Long-term rating			Baa2			BBB			BBB
Outlook			Stable			Stable			Stable

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*Non-GAAP Financial Measure

We are disclosing our credit ratings to enhance the understanding of our sources of liquidity and the effects of our ratings on our costs of funds and access to liquidity. Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For a discussion of recently issued accounting standards, see Note 1, “Organization and Basis of Presentation.”

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to the critical accounting estimates disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.